India Gelatine Q2 FY27 Results (BSE: 531253)
Signal: Margin expansion
The read
The key inflection is margin rather than demand: Q2 revenue declined 3.6% YoY to ₹4,520.49 lakh, but operating profit increased 11.6% to ₹963.36 lakh and EBITDA margin expanded 291bps to 21.3%; however, raw-material intensity rose to 39.1% of revenue from 35.3%, while H1 operating cash flow turned negative at ₹81.00 lakh despite ₹1,532.38 lakh PAT.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹45.2 Cr | -3.6% | -1.0% |
| EBIT | ₹8.48 Cr | +13.6% | |
| Net profit | ₹7.24 Cr | +12.4% | |
| EPS | ₹10.21 | +12.4% | |
| EBIT margin | 21.3% |
P&L walk
Revenue declined 3.6% YoY to ₹4,520.49 lakh, while operating profit rose 11.6% to ₹963.36 lakh and EBITDA margin expanded 291bps to 21.3%; raw-material intensity worsened and the margin improvement was driven mainly by lower inventory and power costs.
Key positives
- Operating profit increased 11.6% YoY to ₹963.36 lakh despite revenue declining 3.6%, with EBITDA margin rising 291bps to 21.3%.
- Power and fuel expense declined 23.7% QoQ to ₹663.45 lakh, helping offset the 7.4% YoY increase in raw-material consumption to ₹1,768.37 lakh.
- PAT rose 12.4% YoY to ₹723.96 lakh and EPS tracked it at ₹10.21, with no dilution signal.
Key concerns
- Revenue declined 3.6% YoY to ₹4,520.49 lakh, and the filing provides no volume or realisation disclosure to establish a demand or pricing recovery.
- Raw-material consumption increased to 39.1% of revenue from 35.3% YoY, while gross margin compressed 695bps to 38.0%; the filing does not disclose the cause.
- H1 operating cash flow was negative ₹81.00 lakh against ₹1,532.38 lakh PAT, creating a significant earnings-to-cash conversion concern.
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